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On the Hunt for ‘Easter Eggs’ in Fraudulent Transactions

posted on: Thu Apr 13 2017

Easter is right around the corner, and with the holiday comes bunnies, candy, and of course, Easter eggs. We’re not talking about the kinds filled with caramel, stuffed with prizes, or dyed in pastel colors, but the ‘hidden messages’ or warning signs that merchants can look for within transactions that may indicate a sign of fraud.easter eggs

Like the Easter bunny, fraud can hop in and out quickly, but leave a trail of Easter eggs in their wake. Read on for common signs of suspicious activity.

  • Abnormal device behavior: With the volume of online and mobile purchases steadily rising, retailers must be able to differentiate among orders on various platforms and devices (i.e. tablet vs. mobile phone; Android vs. iPhone; mobile web vs. mobile app). Each platform has unique transactional behaviors – ranging from different average basket prices to fraud rates, and knowing the differences between each will go a long way in identifying potential fraudulent transactions. 
  • Email history: Chances are, you’ve had the same personal email account for at least a couple of years – same goes for your customers. Make sure your fraud system cross references the history of an email address used in an order to determine its fraud risk. Some tell-tale factors include how long it’s been around and the velocity of activity. If your current system does not monitor accounts’ email history, it may be time to consider a new one (Kount works with Emailage to provide intelligent fraud risk assessment using an email address as the key data element to identify transactional risk and streamline transaction approvals).
  • Location, location, location: It’s not only a tried and true motto but also an especially helpful Easter egg to detect fraud. Does the credit card address or IP address match the shipping location? Are multiple orders being sent to the same address but purchased with different payment methods? Did the transaction originate in a region commonly associated with fraud? Your fraud system should monitor for multiple location factors and any of the above red flags, which are usually an indicator that something suspicious is happening.  
  • Unusual purchases: Merchants know their average transaction price point, as well as quantity – any purchases (especially from new customers) that are significantly different than normal should be a red flag. For instance, an electronics retailer should think twice if a customer buys 10 HDTVs in one order, and an apparel retailer should be suspicious if an order comes in for 100 pairs of shoes. On the other end of the spectrum, multiple consecutive small purchases can also signal a fraudster in action.

While fraudsters are constantly evolving to remain one step ahead of merchants, there are common threads among fraudulent transactions to look out for that can serve as initial indicators for identifying and preventing fraud. With greater vigilance and a fraud prevention strategy in place, fraudsters won’t be able to hop away so easily. Check out our "Fighting Fraud & Chargebacks" eBook and discover how to turn your chargeback losses into wins.